NOTHING DONE IN BRUSSELS, PRICE LISTS UNDER SHOOT. BUT IN WALL STREET THE BEAR TAKES A BREAK
“Today we will not make decisions” Mario Monti had anticipated on his arrival in Brussels, underlining how the EU summit serves to make “a list of proposals, ideas, hypotheses” for growth in order to then make clear and shared decisions in June. It is a pity that the markets do not intend to adapt to the methods and times of EU policy, as confirmed by the fall in price lists throughout Europe. In short, distrust reigns supreme almost everywhere even if the experts smell the air of a rebound. Here's how an operator in Hong Kong sees it, the square where the short selling record has been recorded for 13 years now. “The Bear dominates the market – says Alex Wong of Ample Capital to Bloomberg – But between now and the end of the month there will be coverings: the US stock exchanges will remain closed next Monday, May 28, and it is not excluded that Europe will take some initiative in long weekend. Better to close the positions”.
In the meantime, Europe is doing badly. Italy worse. Piazza Affari closed the day as the worst stock exchange on the continent: the FtseMib index showed a fall of 3,6%. Paris fell by 2,6%, London lost 2,5%, Frankfurt -2,3%.
The day also started badly on Wall Street, both due to fears about the stability of the euro and the sinister signals on technology arriving with the disappointing quarterly report of Dell -17%. But the atmosphere calmed down in the final. The credit goes, in part, to the news arriving from Brussels and in particular to the pressing request for pro-development interventions by France and Italy. In part, at the exit of the president of the Minneapolis Fed, Narajana Kocherlakota, who defined a new Quantitative Easing as likely in the summer.
But the encouraging data from HP had an influence: the quarter closed with turnover down by 2,9%, but the company has already been reacting with a drastic cut in costs. At the end of the session, the Dow Jones closed at -0,05% after having recovered the initial losses (-1,5%). In positive territory, the Standard & Poor's 500 +0,13% % and the Nasdaq Composite +0,39% not at all disturbed by the news of the first class action against the placement of Facebook.
Lists in red, however, in Asia: Tokyo - 0,62%, Hong Kong -0,54%. In addition to fears for Europe, the slowdown of the Chinese manufacturing machine weighs more markedly than expected. The Euro against the Dollar touched 1,256, a level not recorded since July 2010. This morning the single currency traded at 1,2574. The single currency is at its lowest since November 2008 against the British Pound and since February of this year against the Yen.
WTI oil fell to 90,5 dollars a barrel (-1,5%), the lowest since last November. Gold lost 1,8% to $1.539 an ounce. Finally, the ten-year Btp/Bund spread widened to 425 points (+17 basis points), the yield rose to 5,64%. Meanwhile, the Schatz, or the two-year Bunds, were placed at 0,07%.
In Piazza Affari it was saved Fiat +0,21% following the announcement of the agreement with Mazda for the construction of two coupe spiders which will be manufactured in the Japanese factory in Hiroshima. Stm+1,18% is also on positive ground at its Investor Day in New York yesterday: the stock capitalizes on Samsung's order to the subsidiary St-Ericsson.
For the rest, a barrage of negative signs rained down on the price list. The decline of Pirelli , down 6% after Goldman Sachs lowered its recommendation to a neutral da buy. Fiat Industrial it lost 5,7%. Widespread reductions also for other industrial stocks: Finmeccanica fell by 5,2%, Prysmian -4,1%.
Parmalat lost 5% after the decision to acquire the US assets of the parent company Lactalis for 904 million dollars, at a very expensive price equal to 9,5 times the Ebitda, while the Parmalat share which trades at 4 times the Ebitda .
Today, meanwhile, Edison officially becomes French under the leadership of Edf. In exchange Edipower passes under the control dthe A2A– 0,3% and Iren. Now, to close the game that began 420 days ago with Giulio Tremonti's veto on the sale of the second Italian electricity pole, all that is missing is the takeover bid on the float (20% of which half in the hands of Tassara) at 0,89 euros.
Widespread downside scenario among financial stocks: MontePaschi lost 7,6%, Banco Popular -5,7% PopMilan fell by 6,8%, Unicredit it lost 3,2% and Ubi 5,6%, Understanding -4,3%. Bad too Generali -4,3%.
The strange march of Premafin on the Stock Exchange continues. Yesterday the stock gained 23%, in just two sessions after the Consob verdict the stock rose by 60%. Yesterday the board of the company decided, after four hours of discussion, to adapt to the proposals on the share swaps put forward by the Fonsai board of directors. Tomorrow the new boards of Fonsai and Premafin will define the timing of the share swaps in agreement with Unipol. Today, with the publication of the reasons for the Consob decision, the reaction and the next moves of the Ligresti family will be better understood. The ball, however, is about to pass in the field of Unipol which will have to rule on the requests of Fonsai and, above all, of Consob which will have to dissolve the reserve on the exemption from the cascading takeover bid on Milano Assicurazioni.
